Distressed homeowners in the central San Joaquin Valley could reap more than $750 million in benefits from the multistate foreclosure settlement announced Thursday, the state Attorney General's office said.
The settlement is good news for Valley homeowners fighting foreclosure, but it remains to be seen how the plan will be carried out, say Fresno housing experts.
The housing counselors at Clearpoint Credit Counseling Solutions in Fresno were excited to hear most of the money will be used to reduce loan balances and help homeowners refinance their mortgages.
"That could be the difference between a homeowner keeping their home or not," said Cara Pierce, Clearpoint's housing financial specialist.
The Attorney General's office estimates that over three years, Fresno County homeowners could receive $311 million in aid; Madera, $84 million; Tulare, $119 million; Kings, $24 million; and Merced -- the California county hardest hit by foreclosures -- $215 million in aid.
The Attorney General's office could not say how many homeowners might benefit in each of those counties.
The settlement is intended to benefit homeowners whose mortgages are owned by the five major banks that signed the deal -- Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial.
Two-thirds of the state's $18 billion share of the settlement is earmarked for principal write-downs for homeowners who owe more on their mortgages than the homes are worth.
Real estate agent Travis Takeuchi of Clovis, who works with families in foreclosure, wonders how the money will be disbursed. He's not sure the new plan will be more helpful than other federal programs already offered to families in foreclosure.
"A lot of the homeowners that I work with just accept the fact that they were not given a fair chance at a loan modification," Takeuchi said. "There has only been a handful that have taken action and even then they gave up."
John Shore, executive director of the Community Housing Council of Fresno, believes the settlement will be most helpful for families who are trying to save their homes now.
It requires lenders to act faster on foreclosure cases and to give more consideration to people who pay their temporary loan modifications on time to get a permanent modification, Shore said.
"Most of the government programs we've seen have been too little, too late and it didn't apply to us because we were so far underwater," Shore said. "I'm excited to see something that finally has some teeth in it and be what we waited for."